In a typical naked corporate inversion transaction, the corporation's effective global tax liability is reduced, but the effective control does not change.

Question

In a typical naked corporate inversion transaction, the corporation's effective global tax liability is reduced, but the effective control does not change.

Quizplus · Accepted Answer

In a naked corporate inversion, the corporation's effective global tax liability is reduced by relocating to a country with lower taxes. However, the effective control of the company may shift to the new country where it is now incorporated as a foreign entity. So, although the ownership structure may not change, the control may shift to a new jurisdiction.

In a Typical Naked Corporate Inversion Transaction, the Corporation's Effective